Tag: court approval
In yesterday’s blog, I discussed the representation of unborn and unascertained parties in litigation in which their interests are affected. In such cases, the parties should obtain a representation order authorizing a chosen individual, or perhaps the Children’s Lawyer, to represent the interests of that unborn or unascertained person or class of persons. Today’s blog considers the opposite end of the litigation spectrum – settlement.
Rule 10 of the Rules of Civil Procedure empowers the court to appoint a representative to act on behalf of unborn and unascertained beneficiaries. Situations may arise in which such an appointment is not necessary at the outset of litigation, for example, where the unborn beneficiaries need not be named as parties, but which may become necessary to conclude a matter.
In particular, where the parties to litigation agree on terms of settlement, that settlement is subject to the approval of the court if it impacts the interests of a party under disability, such as a mi
nor. Similar principles apply to circumstances in which an unborn or unascertained beneficiary is not a party to a proceeding but is nonetheless “interested in the settlement” in accordance with Rule 10.01(3) of the Rules.
Rule 10.01(3) authorizes a party appointed by representation order to “assent to the settlement” entered into by the parties to the litigation. If the judge hearing the motion for court approval is satisfied that the settlement is “for the benefit of the interested persons who are not parties”, and the representative does, in fact, assent to that settlement, the court is empowered to approve the settlement on their behalf.
As a point of practice, although motions for court approval on behalf of parties under a disability have strict requirements as to the nature and content of the materials to be filed, there is no such strict requirement for approval motions brought pursuant to Rule 10. That said, parties bringing such motions would be well advised to comment on the benefits of settlement from the perspective of the unborn and unascertained beneficiaries in order to assist the court.
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The court’s authority to approve settlements of claims that impact the interests of persons under a legal disability, including minors and incapable persons, is well-known. Rule 7.08 of the Rules of Civil Procedure provides that any settlement of claims made by or against a person under disability is not binding unless approved by a judge. Implicit in this Rule is that the court is to ensure that a settlement impacting the rights of individuals who cannot legally consent to such a settlement is, in fact, in the best interests of those individuals.
Rule 7.08(4) lists the court material that must be delivered as part of any such motion for court approval and includes, among other items, an affidavit of the lawyer acting for the litigation guardian of the incapable person “setting out the lawyer’s position” vis-à-vis the proposed settlement. In the recent decision of the Superior Court of Justice in Grier v Grier, the Court grappled with the extent of the lawyer’s obligations in preparing such an affidavit, particularly when questions of privilege are invoked.
In the Grier decision, the parties to the litigation had agreed on terms of settlement. However, as they were both under a legal disability, the parties brought a motion seeking court approval of the settlement not only on their behalf, but also on behalf of two non-parties whose interests were impacted by the settlement. One of the non-parties, S, brought a subsequent motion seeking copies of the materials exchanged by the parties in the litigation generally, as well as on the motion for court approval.
The court denied the former on the basis that the non-party was not entitled to service of any court material exchanged by the parties unless otherwise ordered by the court, as she had not filed a Notice of Appearance. As to the latter, the parties had previously agreed to an order that the two non-parties would be entitled to service of materials relating to settlement. As such, the court found that S was entitled to service of the materials for the motion for court approval.
However, the main issue before the court related to the adequacy of the materials produced. The parties had each served the non-parties with incomplete motion materials, including affidavits of counsel for the litigation guardians which had select sections omitted on the basis of privilege. S, as moving party, sought disclosure of the complete motion materials inclusive of the omissions.
The Court considered the authorities, including the Rivera and Boone decisions, and held that lawyers delivering affidavits pursuant to Rule 7.08(4) ought to be more than capable of doing so without breaching privilege. The lawyer’s obligation in that respect is to simply provide assurance to the court that they advised their client as competent counsel would and that the settlement is in their client’s best interests.
Should counsel go further than is required under the Rule, then as the judge in Boone pithily held, “that is counsel’s problem.” If necessary, alternative relief, such as sealing orders, may be considered, but at first instance, it is clear that the court will expect counsel to be able to draft materials in such a way so as to discharge their obligation without butting up against questions of privilege.
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